Clean energy now cheaper than traditional fuels in Australia

Date

08 February 2013

MELBOURNE: Unsubsidized clean energy now costs less than fossil fuels to generate electricity in Australia, according to a new report by Bloomberg New Energy Finance (BNEF).

The new BNEF data shows that electricity can be produced by a new Australian wind farm at a price of AUD$80 per megawatt hour. This is less than the AUS$143 cost of the same amount supplied by a new coal-fired power plant, or AUS$116 from a natural gas powered plant, when the cost of carbon emissions is included.

Cost-competitive clean energy

While the price of wind energy has dipped 10% since 2011 due to the lower cost of equipment, solar power costs have plummeted by an even bigger 29%, the report states.

BNEF’s analysts conclude that by 2030, dispatchable renewable generating technologies like biomass and solar thermal can become cost-competitive, suggesting that the Australian economy could be largely powered by clean energy in the future.

In the report, Kobad Bhavnagri, Analyst, Bloomberg New Energy Financewrote: “The low and falling costs of renewable energy and high and rising costs of coal- and gas-fired plants suggest that much of Australia’s new generating capacity is likely to be renewable.”

Australian Clean Revolution

The cost of traditional fuels is rising due to the Australian Government’s price on carbon emissions, which was implemented last year. Big polluters are now charged AUS$23 a metric ton for carbon emissions.

Michael Liebreich, CEO, BNEF, said: “The fact that wind power is now cheaper than coal and gas in a country with some of the world’s best fossil fuel resources shows that clean energy is a game changer which promises to turn the economics of power systems on its head.”

Caroline Bayliss, Australia Director, The Climate Group said: "The notion of renewables being the more costly option is now woefully out of date. A concerted switch to renewable energy can keep electricity prices down in response to the inevitable retirement of out-dated fossil infrastructure and power forward the Clean Revolution in Australia."